Education for Investors
What’s the Difference? STR, Airbnb, VRBO, Vacation Homes - Terminology Explained
Breaking down the industry lingo so you know how to categorize your property
If you are just diving into the world of short term rentals, Airbnbs, VRBO’s, and vacation homes you might be a little bit confused as to what is the difference between them all.
In this post we are going to explain the exact differences between the lingo and what each verbiage means, and give you ideas as to how to classify your rental property.
Defining the Terminology
What is a Short-Term Rental (STR)?
A short-term rental is an industry-wide umbrella term for any property that is rented out for brief periods, typically less than thirty days. This also refers to rental properties, regardless of whether they are in a vacation market or not.
The property could be a single family home, apartment in the city, camper on a farm, or even a private room.
Properties that are listed on the website platforms of Airbnb.com, VRBO.com, vacation rentals on property management websites that are rented out for under 30 days are technically considered short-term rentals.
Short-term rentals are regulated more stringently than other types of rentals - like mid-term rentals or long-term rentals. This is because they blur the lines between residential and commercial use. Municipalities implement strict controls to protect affordable housing stock, preserve neighborhood character, require different taxation, guest safety and to monitor growth of this particular type of business within their jurisdiction.
Regulations differ between city, county, and state levels, so it is wise to do your own research prior to purchase of a property. This may require you connecting directly with local regulating bodies to understand the rules and regulations surrounding your particular city.
What is an Airbnb?
An Airbnb is a slang term for a short-term rental property that is listed on the Online Travel Agency (OTA) website of Airbnb.com.
Platforms like Airbnb.com are intermediaries bringing together travelers and rental properties. Travelers use Airbnb.com to search many different rental properties all within a single user experience, on the app or website, giving them the ability to search internationally, filter for different properties or amenities, and save rentals that they want to visit in the future.
Airbnb.com consistently ranks as one of the top five most visited travel and tourism websites globally with an average of 100 million to 120 million global visitors per month. With the majority of its social media referrals coming from LinkedIn at 31.8% of total traffic.*1
Because of this volume of traffic, short-term rental owners and managers leverage Airbnb.com to give their property a greater level of visibility and to an audience that is looking for properties to stay at instead of a hotel while they travel.
Airbnb is unique because:
Showcasing a variety of property types: entire homes, private rooms, shared spaces, even unique stays like tree houses or converted barns
It serves a broad mix of travelers: solo adventurers, couples, business travelers, and groups.
It charges a service fee to both the host and the guest on each booking.
It’s known for it’s review system which builds trust between strangers on both sides of the transaction.
What is VRBO?
VRBO is an Online Travel Agency platform like Airbnb, it stands for Vacation Rental By Owner, and owned by the Expedia group. It operates similarly to Airbnb in that it connects property owners with travelers but there are some important differences.
Here is how they differentiate:
VRBO only lists entire properties. You won’t find shared rooms or partial-home listings here.
Its guest base skews towards familiars and larger groups booking for longer stays, like week long beach trips or ski vacations.
Hosts can choose between paying per booking or subscribing to an annual plan.
It tends to attract guests who are specifically searching for a vacation rental rather than a hotel alternative
When looking at the platform from a web traffic perspective it has about 50 Million users a month with the majority of its social media referrals coming from Facebook at 70% of all social media traffic.
What is a vacation home?
A vacation home is a property that is used by the owner for leisure or travel purposes rather than as a primary residence. This is a property type, and not a platform or a category of rental activity.
What differentiates a vacation home:
The owner can use it personally whenever they want (and block off those dates from rental calendars)
When it is rented out, it becomes a short-term rental - and might be listed on Airbnb, VRBO, or with a property management company
Some vacation homes are never rented at all, they are solely for the owner’s personal enjoyment.
Vacation homes are often in desirable destinations: beach towns, mountain resorts, lake communities
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